Key Points
- Bitcoin (BTC) withdrawals from exchanges are at a multi-year high, with around $2 billion withdrawn on March 1 alone.
- New investors are entering the Bitcoin market, with a significant increase in younger coins and dormant coins reactivating.
Bitcoin is being withdrawn from exchanges at an unprecedented rate, as the price of the cryptocurrency competes for all-time highs. Data analyst James Van Straten, who works at a crypto insights firm, has highlighted this trend of multi-billion dollar BTC withdrawals.
Withdrawals Echo 2021 Trend
Despite mainstream investors not fully returning to the crypto market, Bitcoin exchanges are seeing their BTC reserves depleted. On-chain analytics firm Glassnode’s data, shared by Van Straten, showed that withdrawals on March 1 were around $2 billion. According to Van Straten, this level of withdrawal is one of the largest in over five years.
Glassnode’s data also shows daily BTC outflows roughly matching the record withdrawals seen on June 28-29, 2021. Van Straten pointed out the role of U.S. spot Bitcoin exchange-traded funds (ETFs) in this trend, excluding around $200 million sent to custodian Coinbase Pro.
Exchange Balances Depleting
Major exchange Binance saw about $400 million in outflows, with large outflows occurring over several days. The rest of the withdrawals were seen by Coinbase. These Binance outflows are particularly noteworthy as they are unrelated to the ETF.
According to Glassnode, the total BTC assets available on the major trading platform it monitors stood at 2,286,347 BTC ($142.5 billion) as of March 2. This is the lowest amount since March 2018, when BTC/USD traded at just $8,000.
New Investors Entering the Market
Meanwhile, data tracking the composition of the Bitcoin market shows that new entities are now entering the market. There has been a significant increase in “younger” coins, and dormant coins that have been inactive for six months or more are reactivating.
This influx of new investors is expected to continue, leading to a sharp decline in the ratio of older to younger coins, and paving the way for a strong bull market.
